Obama to Raise Minimum Wage for Federal Contractors - CNN

(CNN) - While President Barack Obama’s attempts to increase the nation’s minimum wage through legislation have stalled in Congress, the White House announced plans on Tuesday to use the president’s executive powers to partially address the problem.

Just hours before the President is scheduled to deliver his fifth State of the Union address, the White House revealed that Obama will issue an executive order to increase the minimum wage for new federal contract workers.

Obama to Raise Minimum Wage for Federal Contractors - CNN

reply to post by darkbake


All i can say is, way to eviscerate the proletariat. Go figure that federal workers get this before average citizens who can barely find jobs that pay higher than minimum wage. in my state its 7.25$..........7.25$. Thats a joke. Anyway thats my rant and im done but im not surprised it plays out this way. The people who need it most are usually the last to get whatever it is that they need.

reply to post by darkbake


So, the background on this - the Tea Party holds a very extremist and strong hold in the House of Representatives at the moment. In fact, that was the origin of the budget default and government shutdown back in October - congress has been very hard to work with this time around.

Meanwhile, we have a growing wealth gap between the wealthiest 1% and the rest of us - and the middle class is falling farther behind, as well as the poor - in fact, as far as the poor are concerned, there are legitimate worries that it may not be possible for them to survive without government aid like food stamps.

USA Today - Food Stamp Applicants Doubled over Past 10 Years

And the poor are growing. In fact, a growing number of food stamp applicants are actually college graduates. In other related news, Wal Mart was forced to back a wage increase for its workers that didn't make sense from a cost-benefit standpoint - however, the premise behind this wage increase was that by existing, Wal Mart was actually taking away business from small business owners nationwide who may have paid better wages.

The New Face of Food Stamps: Working Age Americans (Fox News / AP)

The Economist, a well-renown European business periodical, has run the numbers and discovered that the U.S. can afford to raise the minimum wage to $10.00 without causing job loss - and this is using math and facts.

Moderate minimum wages do more good than harm. They should be set by technocrats not politicians
Dec 14th 2013 | From the print edition

ON BOTH sides of the Atlantic politicians are warming to the idea that the lowest-paid can be helped by mandating higher wages. Barack Obama wants to raise America’s federal minimum wage by 40% from $7.25 to $10.10 an hour, and more than three-quarters of Americans support the idea (see article). In Germany, one of the few big rich-world countries still without a national wage floor, the incoming coalition government has just agreed on an across-the-board hourly minimum of €8.50 ($11.50) from 2015. In Britain, which has had a minimum wage since 1999, the opposition Labour Party is keen to cajole firms into “voluntarily” paying higher “living wages”.

The Economist - Minimum Wage Logic

However, Obama is entering new territory by using his Executive Orders in this manner. Using an executive order to raise minimum wage, even for Federal workers is a huge step - especially because CNN stated that he could be doing it to show that he is also willing to use an Executive Order to raise minimum wage across the board. Enter John Boehner (again).



John Boehner (R) - Speaker of the House

Tuesday morning, House Speaker John Boehner pushed back against the executive action by the President.

"This idea that he's just going to go it alone, I have to remind him we do have a constitution. And the Congress writes the laws, and the President's job is to execute the laws faithfully. And if he tries to ignore this he's going to run into a brick wall," the top Republican in the House told reporters.

"Were just not going to sit here and let the President trample all over us," Boehner added.

Obama has already been under scrutiny for misusing his executive powers. Could he be to the point where he is willing to get impeached to get his point across?

Obama: State of the Union Address Tonight (YouTube)

1/28/14 Click Above to Watch

victhebutcher
reply to post by darkbake

 

All i can say is, way to eviscerate the proletariat. Go figure that federal workers get this before average citizens who can barely find jobs that pay higher than minimum wage. in my state its 7.25$..........7.25$. Thats a joke. Anyway thats my rant and im done but im not surprised it plays out this way. The people who need it most are usually the last to get whatever it is that they need.

Very true - and as I stated (you beat me to the opinion piece) The Economist has run the numbers and determined that $10.00 would be a safe place to set the national minimum wage in America that would not result in job loss. And more and more Americans are not able to make it, even with college degrees, even with food stamp benefits.

I think we are going to come to a real crossfire here. I think Obama is literally willing to put his job on the line in order to raise the minimum wage.

victhebutcher
reply to post by darkbake

 

All i can say is, way to eviscerate the proletariat. Go figure that federal workers get this before average citizens who can barely find jobs that pay higher than minimum wage. in my state its 7.25$..........7.25$. Thats a joke. Anyway thats my rant and im done but im not surprised it plays out this way. The people who need it most are usually the last to get whatever it is that they need.

It's a step in the right direction though, isn't it?

You pay wages based on one’s economic output. One’s pay MUST come with a higher rate of return. If someone is paid $8.50 an hour, they must produce and sale more then there pay hourly, plus cover overhead. If this is not achieved then the company goes under.

Simple economics, you raise the minimum wage, the cost of goods and services must be raised as well to cover the new wages.

Example, lets say minimum wage is $10. The government passes a law to raise it to $15 an hour. That’s a 50% increase right. That Mc double Mr and Miss minimum wage are flipping cost $1.29. simple economics dictates that the price point for the Mc Double must also increase to cover the new wages. Your Mc Double you enjoyed before the new law now cost you $1.93.

You say no big deal, ill pay the extra .64 cents so someone has a livable wage. This is where I laugh in your face. Mr and Miss Minimum wage increase 50%, the unintended consequence is the price of all goods and services increase by 50% as well to cover the new costs. This creates a 0% economic gain for those on minimum wage as all goods and services prices must rises to cover new wages.

The minimum wage argument is low hanging fruit for the economically uneducated. Once implemented it doesn’t establish any economic gain and only Provides an illusion that your getting paid better as inflation kicks in and settles the score.

Is this raising federal prevailing wage? That is already high enough. Workers do not usually see this money anyway, it goes into their pension and medical fund or to the unions to run these things. Contractors use this increase to judge their charges, they take a percentage of this increase as an increase to their profit margin. I think the contractors will gain from this the most.

All this will do is boost the money going to insurance, contractors profits, and Wall Street, maybe the worker might make twenty bucks a week more after jumping into a higher tax bracket.

Don't they understand how this plays out in Washington DC. Oh that is right, they want these businesses to prosper and the regular guy to think he is making more money.

I think I might just think about voting republican next election.

Having lived through one minimum wage increase as a minimum wage worker, I'll tell you my experience on it.

I had worked there long enough to have earned about $0.75 above the minimum in raises and was in line for another merit increase. We were short-handed, and they were about to begin looking for extra help when the hike hit. My husband and I were also desperately poor.

Not only did every other worker in the store get an automatic wage increase, but my wages that I earned were instantly devalued because I did not receive a corresponding increase to compensate for what I had already earned through merit. Now, my raises evaporated basically. So, my hard work and effort were devalued. My husband also did not receive any wage increase to compensate him. So his wages were devalued.

Since they had to take the money they were going to use to pay another new hire in order to pay the rest of the employees increased wages they had not earned, they could no longer afford to hire that extra worker. So, we all had to make do short-handed. No extra help was hired and someone did not get a job who otherwise would have. A job was lost.

About two or three pay periods after the increase, I was tasked with hiking the prices of everything in the store. In order to further compensate for the increase. Not only was it more expensive to pay the existing employees in the store, but all employees everywhere were now more expensive, so the cost of bringing in goods was also more expensive. So, we had to charge more for items. It was a ripple effect throughout the economy.

When you're dirt poor and counting literally every penny ... you really do notice when everything gets more expensive. So, OK, some people took more home, but when everything you buy is more expensive, does it matter? And, of course, there are some people who did not get jobs they would have had otherwise. Did they get a fair trade, especially as their world is now more expensive.

Also, now that my husband is in a world that deals with unions, you need to know something else. Pretty much every union contract out there negotiates its rates based on minimum wage. Unions don't make minimum wage. And a lot of unions are already very expensive, but you're not just looking at giving the poor a raise, you're looking giving the unions a raise, too.

This is a major attempt to buy more voted from Obama in his key constituencies - the poor and Unions who are ticked off over Obamacare.

reply to post by camaro68ss


The Economist, a magazine based on Free Market Economics, ran the numbers and we can safely raise our minimum wage to around $10.00 - I just added a link and a chart to my second post - however I am glad you joined the thread and brought that viewpoint to it - that aspect definitely exists.

There is growing criticism of The Obama Administration due to their inability to fix the economy five years into his administration, I think the idea of focusing on benefits and sustainability instead of growth is losing traction.

The honest truth is, while I do agree with the Democrats on their entitlement spending, they have been pretty actively hostile towards any economic growth - and this is where the money to tax comes from.

I do like entitlement spending. I don't like sabotaging progress. My opinion is that raising the minimum wage is a good idea, however I would be willing to ask the question, what is Obama not doing?

reply to post by darkbake


Click the link to see what the average wage a GS (General Schedule) wage is for Federal employees. And that is without locality pay.

www.opm.gov...

For instance, I once was a GS-7/Step 5. My wage without locality was $18.64 an hour. But with locality pay it was actually $22.12 (By todays 2014 pay scale).

And if you look at the pay table, you'll see that EVERY GS position makes over minimum wage.

I know that he is proposing executive orders on Contactors, not federal employees. This will more than likely force those who have the contracts to raise their contract fees as well. This little ripple will travel a long ways and it may even turn into a economic tsunami.

After all, it's our tax dollars that will be paying this bill.

reply to post by TDawgRex


You mean the Fed's funny money right? Our tax dollars are spent long before they get to paying for this.

reply to post by darkbake


based on what you've said, it seems that you have much more faith in facts and the system in general than i do.

yet again i am one of those who believes that anything having to do with federal government should be removed from our system in a completely nonviolent way, so its no surprise to me that i do not sympathize with those who are getting this raise. Easy for me to say though, right? im not part of the fed in any way shape or form, except for the fact that i use their currency.

I don't know, i just think that this should not be and that money should be going to a MUCH MUCH larger group of people than ones with federal jobs. Just my opinion

reply to post by darkbake


Well a minimum wage increase isn't going to expand growth. It's taking even more money out of an employers' pocket and trying to force them to do something else with it then they might have in mind. It's also going to limit job growth by making existing employees that much more expensive, not even starting to talk about unions who negotiate their rates off minimum wage.

reply to post by victhebutcher


Good call on the seems part - sometimes I just attempt to be non-biased and resort to facts to get a neutral viewpoint, sometimes I'm not even sure which side I'm on.

From what I heard on CNN a bit ago this morning, this was meant to be a warning shot to congress that Obama was willing to use his Executive Powers to raise the minimum wage across the board - so I kind of see it as firing a shot across the bow. I absolutely could be wrong on this, but I think Obama may have raised the minimum wage of a small portion of the population as a symbolic gesture showing that he would be willing to do more.

darkbake
reply to post by camaro68ss

 

The Economist, a magazine based on Free Market Economics, ran the numbers and we can safely raise our minimum wage to around $10.00 - I just added a link and a chart to my second post - however I am glad you joined the thread and brought that viewpoint to it - that aspect definitely exists.

There is growing criticism of The Obama Administration due to their inability to fix the economy five years into his administration, I think the idea of focusing on benefits and sustainability instead of growth is losing traction.

The honest truth is, while I do agree with the Democrats on their entitlement spending, they have been pretty actively hostile towards any economic growth - and this is where the money to tax comes from.

I do like entitlement spending. I don't like sabotaging progress.

edit on 28amTue, 28 Jan 2014 09:12:46 -0600kbamkAmerica/Chicago by darkbake because: (no reason given)

No dig at you but its hard to believe a magazine called the economist, who believes in “free market economics” stating its ok if the government raises the minimum wage to $10. The economist magazine just threw away all its credibility right there.

If the magazine believed in free market principals then they would advocated the “free market” setting wages, not the government

reply to post by camaro68ss

Scepticism about the merits of minimum wages remains this newspaper’s starting-point. But as income inequality widens and workers’ share of national income shrinks, the case for action to help the low-paid grows. Addressing the problem through subsidies for the working poor is harder in an era of austerity, when there are many other pressing claims on national coffers. Other policy options, such as confiscatory taxes, are unattractive.

Nor is a moderate minimum wage as undesirable as neoclassical purists suggest. Unlike those in textbooks, real labour markets are not perfectly competitive. Since workers who want to change jobs face costs and risks, employers may be able to set pay below its market-clearing rate. A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs.

So they are looking at it in a more complicated, comprehensive manner.

French lessons
Empirical evidence supports that argument. In flexible economies a low minimum wage seems to have little, if any, depressing effect on employment. America’s federal minimum wage, at 38% of median income, is one of the rich world’s lowest. Some studies find no harm to employment from federal or state minimum wages, others see a small one, but none finds any serious damage. Britain’s minimum wage, at around 47% of median income, with a lower rate for young people, also does not seem to have pushed many people out of work.

High minimum wages, however, particularly in rigid labour markets, do appear to hit employment. France has the rich world’s highest wage floor, at more than 60% of the median for adults and a far bigger fraction of the typical wage for the young. This helps explain why France also has shockingly high rates of youth unemployment: 26% for 15- to 24-year-olds.

So the U.S. is actually extremely far behind the developed world - but as you can see here, the French (go figure) did manage to screw up their work force by having minimum wages too high!

darkbake
reply to post by victhebutcher

 

Good call on the seems part - sometimes I just attempt to be non-biased and resort to facts to get a neutral viewpoint, sometimes I'm not even sure which side I'm on.

From what I heard on CNN a bit ago this morning, this was meant to be a warning shot to congress that Obama was willing to use his Executive Powers to raise the minimum wage across the board - so I kind of see it as firing a shot across the bow. I absolutely could be wrong on this, but I think Obama may have raised the minimum wage of a small portion of the population as a symbolic gesture showing that he would be willing to do more.

edit on 28amTue, 28 Jan 2014 09:20:03 -0600kbamkAmerica/Chicago by darkbake because: (no reason given)

So basically, the President is threatening Congress to do what he wants or else he'll do it anyway. What a lovely way to get cooperation.

I can see it working out well.

So, if the president does not like the checks and balances he simply acts as if the rules do not apply to him. This is WHY there are checks and balances. I am tired of people blaming 'Boner' or the Tea Party. That is basically what you are agreeing too...

reply to post by ketsuko


That is kind of my first impression as well.

darkbake
reply to post by camaro68ss

 

Scepticism about the merits of minimum wages remains this newspaper’s starting-point. But as income inequality widens and workers’ share of national income shrinks, the case for action to help the low-paid grows. Addressing the problem through subsidies for the working poor is harder in an era of austerity, when there are many other pressing claims on national coffers. Other policy options, such as confiscatory taxes, are unattractive.

Nor is a moderate minimum wage as undesirable as neoclassical purists suggest. Unlike those in textbooks, real labour markets are not perfectly competitive. Since workers who want to change jobs face costs and risks, employers may be able to set pay below its market-clearing rate. A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs.

So they are looking at it in a more complicated, comprehensive manner.

Maybe they should stop spending time to fix the broken market and examine why it's broken. Maybe because the feds keep meddling in it?

And if the feds broke it, why advocate that the feds "fix" what they broke by breaking it further?

When the government is the problem, more of it isn't going to be the answer.